Lesson 3: Value-Based Leadership

What is Value-Based Leadership?

Leadership requires taking responsibility for the direction of your company, and that requires courage – one of those characteristics that Aristotle suggested you can develop through practice.

Courage needs to be exercised with restraint, however. You cannot be a successful entrepreneur if you cling to the familiar and comfortable and refuse to experiment. A good leader takes risks – but only appropriate risks. Leaders take initiative and act – but not rashly. As a leader, you need to be a decision-maker and responsibility-taker.

Remember, only when you come across a setback, an obstacle, a difficulty, can you demonstrate the kind of person you really are. It’s not what you say, wish, hope, or intend that reveals your character – it’s what you do. Take it from Batman:

Batman knows his stuff (Source)

Your actions, especially your actions in the face of loss, prove your quality as a leader. Develop integrity and honesty by practicing telling the truth to yourself and others in every situation.

Rising to a leadership position in any organization or in any society is not easy. The competition for leadership is fierce. Only the people who are willing to invest time and energy will hold on to those positions and rise to the top.

As a process, values-based leadership considers the role of a leader from three dimensions and questions how a series of well-defined core values impact each element of the business and its ecosystem. The below diagram outlines the need for these three dimensions to be interconnected for values-based leadership to take place.

Values-based leadership (Source)

The outcomes of this process leads to:

  • Sustainability throughout the organisation
  • Customer and employee emotional engagement in the organisation
  • Organisational agility
  • Authentic leadership

Values-based leadership is a helpful theory, but putting it into practice is difficult. Startups are challenged daily to meet targets, trump competition, and improve customer satisfaction while simultaneously building and nurturing your team. The first step is using your values to set up a reliable company culture that fits what you want to achieve.

Values and company culture

Value-based leadership is rooted in an individual’s own character. It relates to what matters most to you, so you need to understand and define what drives you most and what is most important to you in your personal and professional life. This will lay the foundation for your leadership style.

As a leader in your business, you must embody the core values that build a foundation for cultural innovation, transformation, and growth. If you embody those values, your followers will start to live them out as well.

Successful organisations tend to have a strong commitment to their corporate culture. Think about companies like Google, LinkedIn, Netflix, and Amazon; their company values have not only played a significant role in the people that they hire and the way that they conduct business, but they have also helped them scale from small startups to globally recognised and respected organisations. One thing all of these businesses have learned is that while their culture might shift slightly over time, especially as they scale, their core values should remain the same.

Developing a startup culture

How can you start developing an innovative and successful startup culture? 

Let’s look at five tips that can help.

1. Insert your values at every touchpoint:

Focus on embedding your values into all levels of your business. Ensure that your values are upheld and lived at every step, from the recruitment process for new hires to how you conduct meetings. Be transparent about what type of business you are and how you operate; this will not only inspire those who want to be part of your journey but will hopefully resonate with potential customers. You just need to make sure you remain true to those values!

2. Reward and encourage collaboration

Collaboration might come easily to some people, though it’s harder for others. Luckily, it takes all sorts to build a team. That’s why you need to openly encourage collaborative efforts. If you see someone contributing a great idea or going beyond their role to help others out, acknowledge them!

Focus on creating a culture that nurtures collaboration, no matter what it looks like. A monthly star employee or special mention in the weekly team huddle is a small act of recognition, but those can go a long way.

3. Encourage bad news to travel fast

It goes without saying that your team should be rewarded or recognised for coming up with great and innovative ideas. Sometimes, though, you really need to hear about the bad news as well. If a customer is unhappy or something has gone wrong in the manufacturing process, your team needs to feel comfortable telling you about it. As your business scales, your staff will play a pivotal role in customer interactions. If they feel like they can’t tell you what is and isn’t working, something is seriously wrong with your culture.

4. Build transparency and trust

Startups always have been and always will be high-risk environments. That’s why you need to be open and honest with your team when things are going well, but even more so when things are going off course.

Your method of communicating challenges to team members and investors is critical for building trust and buy-in from those who support you. That doesn’t mean you need to tell your staff every single tiny detail about the business, but you need to keep them informed on areas that directly impact them and their roles so that they know what can and cannot be done to mitigate risky situations.

5. Be attentive

Developing your startup’s culture is an ongoing process that requires continuous care and assessment. Keep referring to your original principles and values.

Unsurprisingly, many startups that experience accelerated and massive growth quickly suffer a tragic split. Why? They failed to develop a culture that promoted a circle of trust. Simon Sinek, in his book “Why great leaders eat last”, discusses the role that culture plays in making team members feel secure, confident and part of something bigger than themselves. As a leader, it’s your job to help shape this culture. Help your team feel safe trusting each other.

Watch Simon Sinek explain how your survival as a startup founder or business leader depends on trusting people who believe what you believe.

Speaking like a leader and communicating your core values is important. It’s about motivating people around you, perfecting the art of persuasion, and inspiring others to do remarkable things.

In this Ted Talk, Julian Treasure provides practical tips on speaking with influence and empathy.

The Role of Vision

The idea of “vision” has been a major focus for leadership studies from both a practical and a theoretical perspective. While we discussed vision in Module 1 of this course, a quick reminder to highlight its importance in leadership and culture will be useful.

Regardless of whether you are a startup leader or a leader within a larger team at a corporate, you need to communicate your vision to your team clearly and convincingly. This vision must be easily understood, and the team must be happy to work towards and achieve it.

While vision can refer to the long-term future plans of an organisations, it can also apply to the daily tasks that need to be completed to reach the much larger goals. An article in the Harvard Business Review noted that effective vision routinely has an almost mundane quality based on current ideas. However, regardless of whether the vision is mundane or complex, great leaders can express that vision in a clear, concise and compelling way.

This kind of communication requires leaders to frame their vision in a specific way, think about the symbolic and/or emotive language they might want to use, and arrange their thoughts systematically to make the process of communicating that vision as compelling and easy to digest as the message itself.

All leaders have a vision, but not all of them can communicate it in a compelling and believable way, resulting in teams who won’t follow and a leader who cannot lead. Effective leaders often use metaphors or analogies that give their vision and message emotional strength and empower the people to whom they are communicating the message. Leaders influence others to follow by communicating clear directions toward a compelling vision of a more positive situation or objective.

One of the senior managers of Dell Computers in South Africa is a great example of a leader who used purposeful and creative communication. He always used to end of his team discussions with a parable. The objective was to get the team to take his words into consideration and act in the way they thought would be most effective and valuable for the business and for the community they served. 

The parable went as follows:

Once upon a time high up in the Himalayan Mountains lived a wise old man.

Every so often he would venture down into the local village to entertain the villagers with his special knowledge and talents. One particular skills was to tell the villagers the contents in their pockets, boxes, or minds – this always wowed the villagers since there was no way he could possibly know.

One day, a few young boys from the village decided to play a joke on the wise old man; they decided to discredit his special abilities.

One boy came up with the idea to capture a bird and hide it in his hands. He knew of course, the wise old man would know the object in his hands was a bird.

The boy devised a plan. He knew that the wise old man would correctly state that the object in his hands was a bird. So, the boy decided he would ask the old man if the bird was dead or alive. If the wise man said the bird was alive, the boy would crush the bird in his hands, so that when he opened his hands the bird would be dead.

But, if the wise man said the bird was dead, the boy would open his hands and let the bird fly free. No matter what the old man said, the boy would prove that the old man was a fraud.

The next week, the wise old man came down from the mountain into the village. The boy quickly caught a small bird and, cupping it out of sight in his hands, walked up to the wise old man and asked, “Wise Old man, what is it that I have in my hands?”

The wise old man said, “You have a bird, my son.” And he was right.

The boy then asked, “Well, wise old man tell me this: Is the bird alive or is it dead?”

The wise old man looked at the boy, thought for a moment and said, “The answer to that, my son, rests in your hands.”

The lesson is that decisions, as with so much in life, very often rest in our own hands. We need to decide what is right or wrong and what we will do with the decision we make. An effective way to communicate a message, right?

The emotional strength carried by the above story, and many others like it, helps team members remember their purpose and provides an almost emotional tie to the business and those heading it up. Those communication skills we described earlier? They’re non-negotiable – but they’re also skills, which means that they can be developed even if they don’t come to you naturally.

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